Ministers are under pressure to reimburse or exempt GP practices, charities, and care homes from increases in national insurance amid warnings they will cause job losses and cuts in services. The rise in national insurance contributions (NICs) has prompted post-budget alarm from doctors and the voluntary and social care sectors, and pleas to ministers for exemptions to avoid widespread cuts to provision.
Doctors have warned that the changes will lead to redundancies in cash-strapped GP practices. Voluntary sector leaders have written to the chancellor, Rachel Reeves, calling on her to reimburse charities for a change that they estimate will cost charities £1.4bn. Care England says the new charges and the increase in the minimum wage will cost social care providers £2.4bn – which will swallow up the £600m provided to the sector in the budget. It called for an “urgent revision” of the budget.
Darren Jones, the chief secretary to the Treasury, insisted that organizations outside the public sector, including GPs, would not be exempt. “They will have to pay employer national insurance contributions in the same way they normally do, and therefore at the higher rate,” he told BBC Breakfast. Asked about warnings from care homes that changes will wipe out extra funding for the sector, he suggested there may be further negotiations in future.
Jones said: “We’ll have to work through that with them, given that we ultimately pick up the bill for social care.” On concerns about GP practices, a Downing Street spokesperson said that forthcoming contract negotiations would determine funding levels.
The BMA’s council chair, Philip Banfield, said: “The increase in employment costs will squeeze GP practices even further. We need immediate reassurance from the government that it will provide additional funding to general practice to cover these costs.” Katie Bramall-Stainer, the chair of the BMA’s general practice committee, said that since the budget she and Banfield had relayed the alarm of doctors to health ministers. “We explained quite how concerned GP partners and practices will be about rising employment costs from April,” she posted on X.
Paul Stanley, a practice manager at Gas House Lane Surgery in Morpeth, Northumberland, told BBC Radio 4’s Today program the changes could cost his surgery about £40,000 a year. “It is a huge amount of money and our staff costs do equate to, I would probably say, about 65-70% of all of the costs of the practice,” he said. “I think what we’re looking at is an unfunded increase in our staffing costs, which may ultimately impact on our resources and our staffing levels.”
GP practices will start to make redundancies, according to Dr. Jess Harvey, a GP based in Shropshire. “During these contract negotiations for our new contract, unless we’re getting given suitable remuneration to cover this national insurance inflation, then we’re going to really struggle,” she told Today. Care providers backed calls to exempt social care providers from the NI rise.
The Independent Care Group chair, Mike Padgham, said: “The government has to do something and it has to do it quickly, as I am already hearing from providers that this might be the last straw for some of them.” Geoff Butcher, of the Blackadder Corporation, which owns a number of care homes in England, said he believed the rise in NICs for employers could lead to some homes having to shut. “We will certainly not be taking on additional staff. We will be having to cut back on improvement,” he told Today.
In their joint letter to Reeves, the chief executives of the National Council for Voluntary Organizations and the Association of Chief Executives of Voluntary Organizations said: “The decision to increase employer NICs – and not to carve out an exemption for them – will place another major strain on charities at a time when we are already struggling. “The harsh reality is that many organizations may be forced to reduce staff, cut salaries, and most importantly, scale back services for the very people they strive to support.”
As the situation unfolds, it is crucial for the government to address the concerns raised by GP practices, charities, and care homes regarding the rise in national insurance contributions. Failure to provide exemptions or reimbursements could lead to job losses, cuts in services, and potential closures of essential facilities. The impact of these changes on the healthcare and social care sectors cannot be underestimated, and urgent action is needed to ensure the continued operation and sustainability of these vital services.
